Redfin, the online real estate broker, is getting ready to launch an initial public offering that could raise up to $100 million, reports say.
The company has chosen the Goldman Sachs investment bank to lead the IPO. Redfin is a company that specializes in buying and selling homes, and offers a mobile application for scheduling home tours and listing suggestions.
Last year was a positive one for the company as its revenue soared by 43 percent to $267.2 million, up from $187.3 million a year before. The company still posted a loss for the financial year, but that was down to $22.5 million, from $30.2 million in 2015. Redfin bills itself as a “technology-powered real estate broker” and it's the human element that leads to a gross margin of 31 percent, much lower than most big internet companies.
Redfin differentiates itself from other technology companies which rely on the internet and mobile to connect businesses with consumers. It has become famous as an online real estate brokerage that doesn't just list properties like other real estate sites such as Zillow and Trulia. Redfin actually employs agents to sell properties and it charges a lower-than-industry-standard 1.5% listing fee.
"In an age when the technology economy is increasingly divided from the rest of the world we have hired our own real estate agents, not as a disposable labor force, but as partners in this business, with a salary, health-care benefits and the opportunity to earn stock options,” the company said in its filing.
Redfin was founded back in 2004, and has been backed by notable investors such as Madrona Ventures, Greylock Partners, Draper Fisher Jurvetson and T. Rowe Price. The company says it has helped customers buy 75,000 homes, worth than $40 billion in total, through 2016.
The company’s biggest rival is probably Zillow, which like Redfin is also based in Seattle, Washington. Zillow’s revenues are around three times that of its rival however, and the company is valued at around $9 billion.